Nigel Pearson conceded he faces a major rebuilding job after his Leicester side stumbled to a 2-1 npower Championship defeat against a vibrant Barnsley whose win was more comprehensive than the scoreline suggests.
Andy Gray scored a brace for the Tykes, with Lloyd Dyer having briefly drawn the home side level at the King Power Stadium.
The City manager said: "They were better than us and that maybe shows us where we are as a club. The expectations are high, of course, but our inability to beat them or create enough goalscoring opportunities was a real problem for us.
"The squad is not as big as people think it is. I hope to rectify that in this window, if we can do business.
"The goals we conceded were poor, both on the counter-attack. They were avoidable and it was sloppy play from us. When your 'keeper is your best player, that shows you where you are at, in many ways.
"My job is to improve the situation at the football club. I believe in building teams, I don't collect players. I'll be doing what I can to build a team here.
"I know exactly what is wrong with this football club and I'll be addressing that. It is a big job and I'll get it right."
Barnsley manager Keith Hill saluted his side's fine performance.
"It was a great win and a great performance. I thought the lads were excellent," Hill said.
"We came up with a game-plan and it worked, so job done.
"We probably could have won by more in the second half. You expect the home side Leicester, with the players that they have got, to expose themselves to the counter-attack which did leave opportunities for us."
Only Dyer and Kasper Schmeichel emerged with any credit from a dismal Leicester performance with the Danish goalkeeper producing a string of fine saves to restrict the Tykes.
Barnsley were in front after 10 minutes when Ricardo Vaz Te and Danny Drinkwater combined cleverly down the left to find an unmarked Gray, who slotted home from six yards.
Leicester levelled in the 15th minute when Dyer latched on to Matt Mills' long ball forward and steered it beyond the advancing goalkeeper and into the bottom corner from 12 yards.
Barnsley recaptured the lead in the 34th minute when an unmarked Gray rose high to head home Drinkwater's cross from the left.
A switch to 4-4-2 after the break lifted City with Richie Wellens heading against the bar and Andy King blasting a good chance wide before Barnsley hit back with Schmeichel racing from his line to deny substitute Matt Done and then diving to his left to parry a shot from another substitute Craig Davies.
In the final minute Schmeichel prevented the Foxes suffering further embarrassment when he produced a fine save to deny Vaz Te after the Portuguese striker had strolled through a ragged Leicester rearguard.
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